In 2002, the World Bank conducted an assessment of accounting and auditing frameworks in Morocco in order to evaluate their strengths and weaknesses and propose an action plan to improve existing practices. International Standards on Auditing (ISAs) were used as a benchmark for the evaluation of Moroccan auditing requirements. The World Bank concluded that Moroccan auditing standards, promulgated by the Certified Public Accountants Association (Ordre des Experts Comptables du Royaume du Maroc, or OEC) in 1998, are "largely consistent" with ISAs existing at the time of issuance of the Moroccan standards. However, they fail to incorporate certain ISAs requirements, are less detailed and do not cover all essential auditing topics. Moreover, the World Bank observed that the majority of chartered accountants do not follow existing Moroccan standards because of the lack of quality assurance mechanisms, regular professional training, and implementation guidelines. The World Bank recommended, among other things, full adoption of ISAs, complemented by standards specific for Morocco. In line with the World Bank's recommendations, Moroccan authorities and other stakeholders developed an action plan which was submitted in February 2004 to the government. No further information as to the implementation of this plan is publicly available.

General Overview

From April to July 2002, at the request of Moroccan authorities, the World Bank conducted a review of accounting and auditing practices in Morocco in order to evaluate the weaknesses and strengths of the accounting and auditing requirements, and to review the reporting requirements against actual practices. International Financial Reporting Standards (IFRSs) and International Standards on Auditing (ISAs) were used as the benchmarks for assessing national standards. The Report on the Observance of Standards and Codes (ROSC), published in July 2002 as a result of the assessment, contained a suggested reform agenda and a detailed action plan to improve the accounting and auditing framework in Morocco. The World Bank website discloses that, after the publication of the ROSC, Moroccan authorities and other stakeholders analyzed the recommendations of the World Bank and used them to develop an action plan that was submitted in February 2004 to the government. This action plan features four major components. First, it called for the "adoption of financial standards conducive to transparent financial reporting." Second, it advocated the establishment of professionalism in the accounting field and improving the quality of statutorily required financial-statement audits. Third, it introduced a more effective approach to enforcement, in order to "ensure public interest entities comply with IFRS in their general-purpose financial statements." Finally, it assured the timely publication, and public availability, of financial statements basis.

According to the World Bank 2002 ROSC, auditing standards promulgated by the Certified Public Accountants Association (Ordre des Experts Comptables du Royaume du Maroc, or OEC) in 1998, are "largely consistent" with ISAs existing at the time of issuance of the Moroccan standards. However, they fail to incorporate certain ISAs requirements, are less detailed and do not cover all essential auditing topics. Moreover, the World Bank concluded, the majority of chartered accountants do not follow existing Moroccan standards because they lack mechanisms for quality assurance, systematic professional training, and implementation guidelines.

The World Bank commended the existing legal and regulatory framework in Morocco, which has significantly improved with the adoption of the Law on Corporations. It was noted that Morocco has "a strict legal and regulatory framework to ensure compliance" (p. 10). However, the report noted that certain problems still remain. In order to improve the legal and regulatory framework for auditing, the World Bank recommended that the existing Law on Corporations and other regulations be amended to introduce rules on incompatible activities and consolidated threshold. Furthermore, the Institute of Chartered Accountants should obtain additional resources to ensure compliance of its members with the auditing requirements. Audit requirements for banks are more advanced than the requirements for other finance companies because of inconsistencies between the Law on Corporation and the Law on Credit Institutions which, according to the World Bank, should be eliminated.

The OEC is listed as a member on the International Federation of Accountants' (IFAC) website.

The Principles

ISA 200 Objective and General Principles Governing an Audit of Financial Statements (effective 2006)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 210 Terms of Audit Engagements (effective 2006)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 220R Quality Control for Audits of Historical Financial Information (effective 2005)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 230R Documentation (effective 2006)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 240 The Auditor’s Responsibility to Consider Fraud in an Audit of Financial Statements (effective 2004)

NC

According to the World Bank 2002 report, the corresponding Moroccan auditing standards have not been updated to incorporate subsequent changes to ISA 240.

ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 260 Communications of Audit Matters With Those Charged With Governance (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 300 Planning an Audit of Financial Statements (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 320 Audit Materiality (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 330 The Auditor’s Procedures in Response to Assessed Risks (effective 2006)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 402 Audit Considerations Relating to Entities Using Service Organizations (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 500 Audit Evidence (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 501 Audit Evidence - Additional Considerations for Specific Items (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 505 External Confirmations (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 510 Initial Engagements — Opening Balances (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 520 Analytical Procedures (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 530 Audit Sampling and Other Selective Testing Procedures (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 540 Audit of Accounting Estimates (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 545 Auditing Fair Value Measurements and Disclosures (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 550 Related Parties (effective 2004)

NC

According to the 2002 World Bank report, at the time of the assessment ISA 550 has not been adopted in Morocco.

ISA 560 Subsequent Events (effective 2006)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 570 Going Concern (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 580 Management Representations (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 600 Using the Work of Another Auditor (effective)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 610 Considering the Work of Internal Auditing (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 620 Using the Work of an Expert (effective 2005)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 700 The Auditor’s Report on Financial Statements (effective 2006)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 701 Modifications to the Independent Auditor's Report (effective 2006)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 710 Comparatives (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 720 Other Information in Documents Containing Audited Financial Statements (effective 2004)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.

ISA 800 The Auditor’s Report on Special Purpose Audit Engagements (effective 2006)

II

There is insufficient publicly available information as to Morocco's compliance with this principle.